07/06/2018

1

*Global Social Indicators• HDI (Human Development Index )

• IHDI (Inequality Adjusted HDI)

• PHDI (Perceived HDI - Subjective)

• MPI (Multidimensional Poverty Index )

• MDGs (8 Millenium Development Goals)

• SDGs (17 Sustainable Development Goals)– International Poverty Lines (1,9 U$S a day PPP), Shared

Prosperity (Bottom 40%), My World (Subjective Priorities)

• Happiness and Well-Being (Gallup World Poll)

– Beyond GDP & Better Lives (OECD)

• Expert Commission ((Mis)Measuring Our Lives)

Expert Commission – Stiglitz, Sen, Fitoussi ((Mis)Measuring Our Lives)Also Arrow, Atkinson, Deaton, Heckman, Kanehman, Piketty…

Recommendations#1: When evaluating material well-being, look at income and consumption rather than production

2: Emphasise the household perspective

3: Consider income and consumption jointly with wealth

4: Give more prominence to the distribution of income, consumption and wealth

5: Broaden income measures to non-market activities

* Pages 11-18 Executive Summary

07/06/2018

2

Expert Commission (cont)6: Quality of life depends on people’s objective conditions and capabilities (health, education, etc) measures of social connections, political voice, and insecurity

7: Quality-of-life indicators should assess inequalities

8: Surveys should be designed to assess the links between various quality of-life domains

9: Statistical offices should provide information on quality-of-life dimensions

10: Measures of both objective and subjective well-being provide key information about people’s quality of life. Statistical offices should incorporate questions to capture people’s life evaluations, hedonic experiences and priorities in their own survey.

11 & 12 – Environmental Considerations

OVERVIEW (My Take on the Expert Commission directions)

A good guide can be found in the 2010 book Mis-Measuring Our Lives by two Nobel prize winners in Economics, Joseph Stiglitz and Amartya Sen. The book discusses the conclusions from an international committee of experts on how to measure social progress, and they can be summarized in four recommendations:

Growth in household surveys – The work calls attention to the need to improve the current economic development measures centered on the GDP. In particular, also to emphasize the growth prospects of the average income and expenditure of families interviewed in household surveys, to measure the improvement in mean living standards.

Equality – Measurements of income, consumption and wealth must be accompanied by indicators that reflect their distribution among people and social groups. This means we must keep an eye on the vertical and horizontal inequality of income flows and asset stocks.

07/06/2018

3

• Sustainability – To consider asset stocks such as, for example,environmental attributes to incorporate the sustainability ofperformance indicators as time goes by, in other wordswhether current welfare levels can continue for futuregenerations. The different assets inventories collected by thesurveys and, especially, education and housing to analyze thestability of labor earnings and living standards.

• Perceptions – Lastly, the conjugation of objective andsubjective well-being measurements by using questionsraised in opinion polls relating to the assessment of theirlives is designed to obtain a more realistic view of the qualityof life in different countries. In other words, it is not enoughto objectively improve our lives, but it is also necessary forpeople to recognize this development. Here, we use as abenchmark of subjective indicators, measurements ofhappiness or life satisfaction that has become moreprominent in the recent economic literature.

EqualityLooking at the distribution among

individuals and social groups of

income flows, stocks of assets and

rights.

Sustainability (Assets)

Ability to maintain the standards of living

achieved. Stocks of human,

environmental, physical , cultural

and social (institutional) assets.

Prosperity (Growth)

Growth in mean income and

consumption (not only GDP/National

Accounts but also look to

Household Surveys data and PIT).

Sensibility (Perceptions)

The last dimension is subjective, based on

people’s perception about the country,

the public services and life quality.

How to Measure and Explain Social Progress? (Ends approach)

Stability

07/06/2018

4

Felicidade Futura ( 2015)

2.8 - 4

4 - 5.19

5.19 - 6.39

6.39 - 7.58

7.58 - 8.78

No Data

Source: Gallup World Poll microdata

Future Happiness Life Satisfaction in 5 years – 2015

Brazil had the highest expected life satisfaction: 8.64 on a 0 to 10 scale

Brazil is nine consecutive times the first in the World ranking of Future Happiness 5 years ahead

The Country of the Future?

Brail2014 2013 2012 2011 2010 2009 2008 2007 2006

8,8 1º 8,8 1º 8,72 1º 8,81 1 8,64 1º 8,66 1º 8,68 1º 8,44 1º 8,78 1º

2010 2017

Brazil 8,6 8,1

United States of America 8,0 7,9

Worldwide 6,6 6,5

Life in Five YearsFrom 2006 to 2014 Brazilian youngsters (15 to29 years of age) never had

a mean grade below 9

Brasil is also knownas a Young Country;

Nation6.8

Source : IPEA 2013

Geography of HappinessSatisfaction in 5 Years

2018 as seen from 2013

0 – 4

4 – 5.19

5.19 – 6.39

6.39 – 7.58

7.58 or more

0 – 4

4 – 5.19

5.19 – 6.39

6.39 – 7.58

7.58 or more

Individual8.46

07/06/2018

5

Source: Gallup World Poll 2006 microdata

Future Happiness Gini of Expected Life Satisfaction in 5 years – 2011

In spite of its high income inequality, Brazil has the second lowest inequality of expected future life satisfaction (just after Belgium).

Source: Gallup World Poll 2006 microdata

Future Happiness Social Welfare based on Expected Life Satisfactionin 5 years – 2011

Brazil had the highest subjective social welfare (applying Sen (1976) SWF weights to expected future life satisfaction.

07/06/2018

6

Fonte: SAE a partir dos microdados da PNAD/IBGE

Long Run & Regional PerspectiveEquality

Fonte: SAE a partir dos microdados da PNAD/IBGE

Ranking América Latina

Crescimento Anual 2003-12

1 Argentina 5,50%

2 Colombia 4,68%

3 Brasil 4,60%

4 Perú 4,56%

5 Uruguay 4,42%

6 Bolivia* 3,96%

7 Ecuador 3,79%

8 Panamá 2,77%

9 Paraguay 2,74%

10 Costa Rica 2,72%

11 Chile* 2,48%

12 México 1,08%

13 El Salvador 1,03%

14 Hondura 0,94%

15Rep. Dominicana -0,87%

16 Nicaragua* -1,52%

17 Guatemala* -1,84%

Fonte: CEDLAS/SAE microdados

* Periodos um pouco distintos

Regional PerspectiveProsperity and Sustainability

07/06/2018

7

HUMAN DEVELOPMENT INDEX (HDI) – Education, Health & IncomeHDI 1991-2010

www.fgv.br/fgvsocial

Source: Ipea/PNUD/FJP through Censo/IBGE microdata.

20101991

In 1991, 85,8% of the municipalities had a very low HDI. In 2010 only 0,6%.

Label

Very High (from 0,800 to 1,000)

Very Low (from 0,0 to 0,499)

Low ( from 0,500 to 0,599)

Medium (from 0,600 to 0,699)

High (from 0,700 to 0,799)

Sustainability

0

10

20

30

40

50

60

70

80

90

9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

1970 2016 2065

DIRECTIONS: DEMOGRAPHIC EVOLUTION – BRAZIL

www.fgv.br/fgvsocial

07/06/2018

8

DEMOGRAPHIC TRANSITION ACROSS COUNTRIES

28.0%13.3%

11.0%18.1%

28.6%25.4%

29.8%31.4%

27.5%24.8%

29.7%26.7%

29.6%23.3%

37.8%30.6%

36.7%26.6%

43.3%24.9%25.0%

40.3%37.7%

30.6%28.9%

29.3%29.4%

33.0%32.9%

34.3%31.3%

32.4%33.2%

38.4%31.8%

30.1%38.2%

51.8%39.7%

39.0%41.8%

1.5%5.0%

6.0%7.2%

8.2%8.9%9.2%

9.7%9.7%9.7%

10.2%10.3%10.5%

11.5%12.2%12.2%

14.2%14.8%

15.9%15.9%

16.6%17.2%

18.2%18.5%18.7%18.8%18.9%

19.7%21.3%21.5%21.8%

22.2%22.3%22.4%

23.9%24.3%24.7%

25.2%25.2%

26.3%30.7%

3.1%

5.6%5.9%

3.1%4.8%

7.0%6.2%6.2%

5.1%4.0%

6.3%6.9%

8.5%6.2%

4.9%8.8%

9.9%5.7%

10.5%10.5%

9.4%10.3%

12.4%13.6%13.4%

11.6%11.4%

14.0%14.7%

17.2%17.5%

13.9%13.4%

17.1%17.3%17.8%

7.3%14.8%14.7%

9.3%

0% 10% 20% 30% 40% 50% 60%

QatarRocinha

ÁfricaÁfrica do Sul

BrasilVenezuela

MéxicoColômbia

PeruRep. Dominicana

Estado do RJÁsia

Am. Lat. e CaribeMundo

ChinaCidade do Rio de Janeiro

ChileArgentina

Coreia do SulOceania

RússiaCuba

Porto RicoUrurguai

Estados UnidosAmérica do Norte

AustráliaCanadáEuropa

SuíçaReino Unido

BélgicaHolandaEspanha

FrançaSuécia

AlemanhaCopacabana

GréciaItália

Japão

Taxas de envelhecimento (% da população com 65 anos ou mais)

1970

2016

2065

Brazil spents 13% of GDP in Social Security against 10% in Japan, a country with 3.5 times more elderly. In the next half-century the elderlyshare in the population will grow488% more here.

www.fgv.br/fgvsocial

Aging Rate (% of the population with 65 years or more)

We saw the financial cost/social benefit ratio of different offical transfers including social security

THE FISCAL CHALLENGE

Evolution of the Central Government Primary Expenditures (% GDP)

IF NOTHING IS DONE, IT WILL CROSS THE NEW EXPENDITURE CEILING

07/06/2018

9

EDUCATION ALSO IMPACTED LITTLE BRAZILIAN PRODUCTIVITY:

MAIN LONG RUN CHALLENGE with Fiscal adjustment

Education Without Productivity

Source: Menezes (2017)

See Ricardo Paes de Barros

Years of School

Channels of Impact of Various Types of Policies (means approach)

OverallWellBeing

INVESTMENT ON PEOPLE

WELLBEING STRAIGHT EFFECT

PROVISION OF PUBLIC GOODS AND

SERVICES

EMPLOYMENT AND ENTREPRENEURSHIP

CASH TRANSFERSMINIMUM WAGES

CURRENT NET INCOME

TAXES &SUBSIDIES

SAVINGS, CREDIT AND INSURANCEMICROFINANCE

CONSUMER PROTECTION ,REGULATION AND

FINANCIAL EDUCATION

INCOME GENERATION

ProductivityPRODUCTION

FUNCTION

TRANSPORTATIONSEWAGE

HEALTH

LEVERAGE OPPORTUNITIES AND

DAMPEN SHOCKSDECENT MARKETSTEMPORAL CHOICE

DIRECT EFFECT

UTILITY

DIRECTEFFECT

CURRENTBUDGET

CONSTRAINT

PRODUCTIVE INCLUSION

TEMPORAL BUDGET CONSTRAINT

FINANCIAL INCLUSION

INCOMEPOLICIES

MERITGOODS

POLICIES

ENVIRONMENTALSERVICES

EDUCATION

HUMAN CAPITAL &CULTURE